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No one will admit the system is broken. Sooner than expected perhaps it'll be too evident to deny. Even with US economic data manipulated to look better than reality, economist David Rosenberg said America's economy hit "stall speed" in Q I and Q II, 2011. Q III saw more stagnation, even contraction, he said.
Moreover, back-to-back declines in nonfarm business productivity occurred. Historically it happens 5% of the time around economic cycle inflection points. It was noticeable in 1981 and 2008.
Copper prices reflect economic prospects. On October 21, they hit a 2011 low. Since July, the Conference Board's coincident economic indicator held steady at 103.2 or 103.3. Every economic expansion ends shortly after it peaks. It reached 107.5 in December 2007. In 2008, economic conditions crumbled toward collapse.
In 2000, it peaked at 98.7. Recession began six months later. In 1990, it peaked at 75.0. Recession began the same month. In 1981, it peaked at 60.3 at the same time recession began. Since 1960, downturns coincided with peaks or shortly thereafter.
Many years of destructive US policies headed America for day of reckoning inevitability. Recent year excesses hastened its arrival.
In his article headlined, "The End of History," Paul Craig Roberts wonders how Washington will finance its growing empire given enormous budget deficit constraints. Only money printing provides it. Inflation inevitably results.
Based on how calculated decades earlier, economist John Williams has it at 11.5%. So far, money supply shrinkage, contracting credit, stagnant wages and declining house prices keep it from surging higher.
As 2012 approaches, only America's super-rich have prospered. Others have "been assigned to the trash can," said Roberts.
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